The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Nov, 1985, Volume 53, Issue 6
https://doi.org/0012-9682(198511)53:6<1337:IAEBCT>2.0.CO;2-L
p. 1337-1356
Chi-Fu Huang, Darrell Duffie
A two-period (0 and T) Arrow-Debreu economy is set up with a general model of uncertainty. We suppose that an equilibrium exists for this economy. The Arrow-Debreu economy is placed in a Radner (dynamic) setting; agents may trade claims at any time during [O, T]. Under appropriate conditions it is possible to implement the original Arrow-Debreu equilibrium, which may have a infinite-dimensional commodity space, in a Radner equilibrium, which only a finite number of securities. This is done by opening the "right" set of security markets, a set which effectively completes markets for the Radner economy.
